Mostly for the 3rd party applications. If you have a jailbroken iPhone then that probably doesn't matter too much to you. There are a couple pretty cool free apps already that I foresee using frequently.

Remote - because sometimes I am too lazy to move and walk to my computer to change what iTunes is playing at the moment. The interface is pretty much identical to the iPod player on the iPhone.

ePocrates - medication info, used to use it on my Palm before it broke. The iPhone version includes the ability to look up medications by what the pills look like, so now when patients tell me they take, "That little round yellow pill with the line in the middle" I'll know what they mean.

Pandora - streaming music, even over EDGE. It's practically like having XM.

Shazam - samples music with the microphone and tells you the song, artist, and album.

And of course applications that are interfaces for various web sites, RSS readers, etc. And stuff I haven't explored yet.

There are some non-free <$10 apps that are pretty useful

FileMagnet - requires Leopard at the moment, which I don't have. Will be adding Tiger support soon though. Basically turns your iPhone into a flash drive that can also display documents (including PDFs I believe)